Poroshenko signed a law on indefinite moratoriums on repayment of debts of Russia


President of Ukraine Petro Poroshenko has signed a bill that makes an indefinite moratorium on the repayment of Russia’s $3 billion Eurobond. The bill adopted by the Verkhovna Rada on April 12, returned to Parliament with the signature of the President, the card of the project on the website of the Verkhovna Rada. The bill comes into force the day after publication in the official press. On 30 April it was published in the newspaper of the Verkhovna Rada “Voice of Ukraine”, then may 1 came into force.

We are talking about the amendment to the law “On peculiarities of the transactions with the state, guaranteed state and local debt”: the amendment eliminates the time limit until July 1, 2016 — on the moratorium. “If you do not accept it, from the 1st of July comes the obligation of payments, including the country-an aggressor”, — explained earlier a member of the budget Committee Andrey Gordeev, it quoted the Ukrainian news Agency UNIAN.

In the explanatory note to the bill, the government of Ukraine has stressed that the moratorium on the payment of debt to Russia may be canceled at any time, if the holder of the securities will be achieved agreement on debt restructuring. But Kiev insists that Russia has agreed to restructure the debt on equal terms with commercial lenders, which in November was blamed Ukraine 20% of the nominal value of Eurobonds. Russia considers itself the official lender of Ukraine (this was confirmed by the IMF), therefore, refuses to write off Ukraine part of the debt.

Ukraine in December 2015, placed a moratorium on paying Russia $3 billion Eurobond issued in December 2013. 20 December 2015, when it was maturity securities, Ukraine failed to pay $3 billion and a final coupon of $75 million In February 2016, Russia filed a claim in the English court with the requirement to accept the default of Ukraine and to oblige Kiev to return $3 billion with penalties, interest. The plaintiff says that the penalty interest should be charged at a rate of 8%, which implies a daily increase in debt by $683 thousand Kiev has already twice postponed the deadline for objections to the claim, most recently until may 27, according to Reuters.

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Along with a moratorium on the payment of Russia’s $3,075 billion the Ukrainian government in December decided to suspend the payment of the debts of Ukrainian companies “Ukravtodor” and CB “South” of $500 million to Russian banks (the government acted as a guarantor of the debt). In February, Sberbank of Russia has agreed to restructure the debt of “Ukravtodor” and “South” of $367 million, and in April the Ministry of Finance of Ukraine reported about similar settlement with debt “Ukravtodor” in front of “VTB Capital” by $100 million.